Legacy Minerals Holdings Insiders May Regret Not Buying More, Market Cap Hits AU$17m

Legacy Minerals Holdings Limited (ASX:LGM) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10%, resulting in a AU$1.6m rise in the company's market capitalisation, translating to a gain of 17% on their initial investment. As a result, their original purchase of AU$224.7k worth of stock is now worth AU$262.2k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Legacy Minerals Holdings

Legacy Minerals Holdings Insider Transactions Over The Last Year

The Independent Non-Executive Chairman David Carland made the biggest insider purchase in the last 12 months. That single transaction was for AU$106k worth of shares at a price of AU$0.14 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.16), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Legacy Minerals Holdings insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Legacy Minerals Holdings Insiders Bought Stock Recently

We saw some Legacy Minerals Holdings insider buying shares in the last three months. Insiders purchased AU$25k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Legacy Minerals Holdings insiders own 39% of the company, worth about AU$6.6m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Legacy Minerals Holdings Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Legacy Minerals Holdings and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for Legacy Minerals Holdings (2 are significant) you should be aware of.

Of course Legacy Minerals Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.